Work

Assessing the impact of take-or-pay rates in long-term contracts for hydrogen imports on a decarbonized European energy system under weather variability

Year: 2025

Type: article

Abstract: Climate-neutral hydrogen is set to play a crucial role in decarbonizing Europe by 2050. Yet, assumptions on hydrogen imports vary widely across existing studies—ranging from fully flexible to fixed import volumes — often neglecting the modalities of future hydrogen trade such as long-term contracts (LTC). This paper addresses this gap by investigating the implications of Take-or-Pay (TOP) rates in hydrogen LTCs on a decarbonized European energy system. We employ a numerical model that optimizes generation capacity, storage and infrastructure investment, and dispatch decisions for the European power and hydrogen sector in 2050, explicitly incorporating TOP obligations in hydrogen LTCs. Our findings show that varying TOP-rates induce significant shifts in cost-minimal infrastructure requirements of the energy system. These shifts underscore the necessity to account for the degree of import flexibility in planning assessments for future energy systems relying on hydrogen imports. Additionally, we show that reduced import flexibility imposed by high TOP rates is balanced predominantly by increased hydrogen storage and withdrawal capacity while import capacity decreases. By simulating dispatch decisions for 35 weather years for the energy systems planned with representative weather, we find that systems planned with high TOP-rates exhibit a lower reliability when weather characteristics during operation differ from the planning stage. • Newly developed EU market model optimizes electricity and hydrogen investment and dispatch. • First to incorporate TOP obligations in hydrogen imports into energy system modeling. • Varying TOP-rates shift cost-optimal infrastructure needs in the energy system. • Reduced H2 import flexibility is predominantly balanced by increased storage capacity. • Systems with high TOP rates are less reliable under weather differing from planning.

Source: Applied Energy

DOI: 10.1016/j.apenergy.2025.125784

Authors: Julian Keutz, Jan Hendrik Kopp

Institutions: University of Cologne, Institute of Energy Economics at the University of Cologne

Language: English

Topic: Integrated Energy Systems Optimization

Subfield: Electrical and Electronic Engineering

Field: Engineering

Domain: Physical Sciences

SDGs: Climate action, Affordable and clean energy, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,430